Cost of EIA, economic feasibility of EIA

[RAGHAVA]

what would be an ideal cost to carry out an EIA study without any priliferage.

The ministry now-a-days is looking at pre-feasibility report along with application to provide TOR in order to ensure that the project is viable in terms of profit after incurring all other expenses like Environmental protection, Social & Economic Development etc.

 

So there should also be a procedure to evaluate the economic feasibility of preparing an EIA report to ensure a reliable study.

 

Raghava

[Prashanth.V]

Hello,

The cost depends on the consultant and the organization. The policy is good and stringent with the strong beliefs and ideas of the minister but in reality it is not the procedure followed by any one in the industry. Very few consultants like SENES consultants, SIMA labs, Vimta Labs are actually doing. Dont just go with the name of the consultant and their recognitions, remember their work.

Cost of EIA of Industrial sector like TPP, Cement would be ideally 8-10 lakhs which will prepare from PFR, ToR to final clearence reports.

Prashanth V.
9654284075

[Moho Chaturvedi]

Depending the various factors like the type of project, the location of the planned activity, available information etc the costs of an EIA would vary. Apart from the costs of hiring consultants (and the prices vary quite a bit), there would also be travel, site visits etc + studies that may be required for actually being able to identify impacts.  Therefore, coming to a simple ballpark figure about EIAs may actually not be possible. 

 

If you want a good/reliable EIA report, hire good consultants/professionals who can do the required job. 

[Dr. Hemalkumar Naik]

Great to see the perfect rather most important question.

As you asked, its matter of Project feasibility not EIA cost. when we think of the project feasibility, it is very unique task as it defers from one to another company & project management consultant. besides, it has lot of influence of planning especially of EMP. as the expenses of EMP is always (in>99% projects) an Expenses in their Book and so it has lot to do with Profit from the project. Besides, there are lot of financial aspects like Cash flow, fund flow, liability, IRR, XIRR...etc. and these all need to be worked out with special planning (with financial projection for the payback period or Break Event point) to get the project in profitability mode. generally CAs are doing this, but as they don't have technical knowledge, can't make changes in project technicality and many projects either faces problem of Loss or Lower profit. As of now we have worked out many project for same with special provisions of earning from side activities. Even in a recent project we have planned many things which will help proponent to earn almost 10-25 Lacs per annum as side income from Environment & other management which are otherwise (in general) reflected as 100% expenses. We have workout the project for the said profit after expenses of EMS. so in short for economic feasibility there is a separate financial procedure including many financial theories and calculation as well as modeling.  

Now as you asked to integrate the EMS cost in such analysis/study, it is to noted that the EIA is first expenses probably in all cases and if you can negotiate with proponent with some advance strategies the cost of EIA can be included in First year Expenses/budgetary of project finance study for economic feasibility. The cost of EIA as said by other depends on many aspects like defined by Dr. Sudhanshu Kumar , but again if you plan perfectly the standard cost of monitoring as well as overheads are reduced significantly. Just make a strategy after careful reading of CPCB and MoEF guideline for monitoring. There are lot of things which can reduce your Base monitoring cost and overheads. Other cost like QCI & Tax are standard cost and so you can not workout on that. In short again its matter of one’s knowledge of Finanical maters as well as Technical aspects (Project technical aspects for Production & utility integrated with EMS). As you might have noticed many Env. Firms do not have even competent personnel for EIA than question of Finance is not arise. And more where you will find both, there will be deferent personnel working separately and so its all difficult to pull out high profitability. Well as a professional, I would like to offer one proposal that if you get any such project you can contact us. We will try to work out for the best and surely our team will make deference with high profit from any project provided proponent agrees to change the technical planning as per our suggestion.

Well the main question can not be explained in little line as it needs a discussion rather training of at least two-three days. But i have tried my level best to answer in few lines. Hope its helpful to you for primary understanding of Financial Aspect-Economic Feasibility.

[Ajay B Dwivedi]

Dear Raghava,

To best of my understanding this can never be a fixed figure. TOR can be used as the guideline for arriving the cost. If we go through the TORs it is always found that they are cut & paste business only. The fact is that the MoEF itself has stipulated the process where there is nothing that can be called "pre-feasibility". On what ground the pre-feasibility is demanded is not understandable. This is used only to complicate the matters in stead of keeping the matters strictly through F-1. F-1 is a broadspectrum identification of aspects required to be investigated in EIA. MoEF adds or authenticates the PP's TORs and then the cost factor enters. With MoEF's lithargecy in name of being overburdened with work is deplorable for the aim of EIA. The "consultants" in turn give a full package of "treatment".

To exemplify the matter consider a small resin manufacturer in a notified industrial area and the same process carried out on a may be smaller case out side. The disparity in classification takes the same type of activity from A1 to B2.

Another factor of QCI accreditation has now entered and the economic issue attached with the matter is not yet fully complicated. QCI is  openly allowed to aid the monopolization of business.

Socio-economic aspect has to be analyzed once with the census data superimposed by any Government agency once for all and avoid the aimless repitition forced. Actually, this should be included in Jan Lokpal perview and SEAC / EAC / SEIAA etc should be made accountable for the socio-economic loss.

[RAGHAVA]

It was great to learn such beautiful things but i think my language is somewhere wrong and that's the reason some discussion went out of topic. whatever it may be it has given good ideas regarding various aspects.

 

actually my idea is Ministry is trying to understand the viability of a project in various aspects like the proponent should get profit after meeting all statuory requirements like environmental protection, CSR activities and other overheads etc

 

In the same way if QCI can evalute the Cost of EIA so that a proper report comes out after meeting atleast 10-20% profit with all the conditions laid by QCI & MoEF for any consultancy firm whether big or small. However, the choise of selection of environmental consultant remains with the Project proponent himself

 

Raghava

[Prof Dr V N Sivasankara Pillai]

Dear Mr Raghava,

The cost of an EIA depends on the nature of the project, magnitude, location, resource use and abuse etc. Baseline data acquisition (both primary and secondary) become expensive if no background literature is available. Quality assured analytical data on baseline quality of air, water, noise, soil etc also prove to be very expensive. Planning by environmental experts is needed for all assessments. The time and wastage of resources can be saved, if an EIA Design Charette is conducted with participation of ecologists, project experts, EIA experts and MoEF functionaries.

The prefeasiblity study should not be limited to cash flow, it should also address environmental and social feasibility.

[Dr. Hemalkumar Naik]

Dear Mr. Raghavacharyulu,

I think i understood the matter in sense of project economic viability and impacts of environmental cost on project economics. And So i replied with some highlights of my experience. I hope those information i shared is helpfull to you for getting basic idea. For more details you can also refer books/references of financial evaluation/calculations as well as Environmental economics. Lot of references are available on these topic.

M V RAGHAVACHARYULU said:

It was great to learn such beautiful things but i think my language is somewhere wrong and that's the reason some discussion went out of topic. whatever it may be it has given good ideas regarding various aspects.

 

actually my idea is Ministry is trying to understand the viability of a project in various aspects like the proponent should get profit after meeting all statuory requirements like environmental protection, CSR activities and other overheads etc

 

In the same way if QCI can evalute the Cost of EIA so that a proper report comes out after meeting atleast 10-20% profit with all the conditions laid by QCI & MoEF for any consultancy firm whether big or small. However, the choise of selection of environmental consultant remains with the Project proponent himself

 

Raghava

[Ajay B Dwivedi]

While considering the project cost and its analysis, Cost to Banefit analysis on short term and long term basis have to be evaluated. The cost of environmental impacts identified need to be warrantied by the people responsible for approving the project. After all when the project can be rejected in name of the adverse impact that can be caused by a group of burocrats in a room, the same people should be ready and be responsible for the extent of damage identified by them. If required there has to be an insurance to cover the damage and acturials have to be involved in the team to calculate the probable environmental damage to arrive at the cost.

By simple prescriptions of 27 or 47 or any number of TORs damage cannot be assessed or quantified. As I have mentioned and all would agree that TORs are more or less the same for all projects. Why the prescribers of the TORs are not put to task for having done the cut and paste jobs?

It is simply surprising statement by Prashath V that cost of EIA depends on the consultant and the organization. For a given set of exercise calories consumed by two individuals are expected to be the same but the physical distress they undergo may differ.

I am sorry but I do not agree with Dr Pillai over the issue of Social Studies, the Government has already got a Department / Ministry working for this, to support the matter they have Census Dept also through which the Government has to have the facility for analyzing the matter for testing or counterchecking the reliability of data submitted through the EIA or they have to consider the matter for the purpose and not the PP / consultant.

Moreover, the Pre-Feasibility is not supported by the Notification. If MoEF needs the same they have to Notify the matter. Or more easily these days their notion keep on coming through OMs without any hindrance. 

If you stick purely to the EIA's cost charged by the consultant, consider that MoEF has prescribed more or less same TORsas mentioned earlier, irrespective of the cost and number of industries in the area. The SW monsoon predictions published by met office, is also a type of environmental impact where the impact is predicted for a large area like Indian sub-continent. Consider two EIAs carried out in an area of 25 - 50 KM apart, how can you expect that the conditions will change, cost of the data will start reducing second project onwards. How many of our experienced consultants have discounted this cost and passed on the same physically to their customers?

Writing an EIA report and prediction of impacts with slightest of authenticity is scientific art. Cost of EIA is easily forgotten by any industry but the cost of impact can never be forgotten by the society. Underline is that:

COST OF EIA IS NO CONSIDERATION.

NO EIA CAN BE RELIABLE UNTILL THE ANSEWRABILITY IS ESTABLISHED FOR THE AUTHORITIES APPROVING THEM.

[Ajay B Dwivedi]

There is an impression in minds of people that the cost of EIA charged by the consultant are charges that he either earns straightway and the PP is paying the sum to one person and not the organization and a set of scientifically engineered multi-disciplinary effort and days of input and the thought process the consultant goes through during the preparation. He has to keep his mind and hands free for the job his PP has entrusted to him for the project. It is mostly thought as a cost to darken the blank papers and the other "management" the consultant has to carry out for foiling the future misdeeds which go uproposed with the project proposal that is read by others.

On the other hand authorities have got different view about the consultant's proficieny and more often or not they are also seen enquiring about the fees paid to the consulting organization.

As far as to cost of a job is concerned, this may differ from organization to organization widely and without any proportion to sense any arithmatic.

 

WHAT RAGHAVA HAS INITIATED TO DISCUSS IS MORE PERTAINING TO THE GOVT MACHINERY THAN THE CONSULTANTS.

[Dr. Sudhanshu Kumar]

Following to Mr Raghava clarification, my comment was irrelevant – therefore, I have withdrawn my comment to maintain the flow of the discussion.

Regards, Sudhanshu

[RAGHAVA]

Dear Dr. Sudhanshu,

 

I started feeling guilty from your statement that your comment was irrelevant so you would like to withdraw from the discussion. If i have hurted you in any way kindly forgive me.

 

Firstly i couldn't get you for what clarification given by me has hurted you so much. Is it because of the comment made by me on your discussion or anything else. whatever it may be please continue the discussion. if noble & knowledgeable people like you stop sharing knowledge by way of discussion it will be a disastor. rather i stop posting my stupid discussions.....................Raghava

Dr. Sudhanshu Kumar said:

Following to Mr Raghava clarification, my comment was irrelevant – therefore, I have withdrawn my comment to maintain the flow of the discussion.

Regards, Sudhanshu

[Chandra Kishore]

MV, No need to take things personal on a discussion. Everyone here is mature enough to provide only professional inputs and debate.  Dr. Sudhanshu, just wanted to maintain the flow of this discussion.

 

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